pastrymom

We had expected to receive financial aid for our child - we make under 100,000 a year and when we bought our house only 8 years ago it was worth 250,000. (We had help from our family with a decent down payment). The problem is that last year a house 2 doors down from us was sold for 350,000 and then knocked down and a 1,500 sq. foot house was replaced with an 11,000 sq. ft.house - yes 11,000. This house is valued at close to 2 million.It is totally out of wack with the rest of the neighborhood where houses range from 1,600 to 3,000 sq.ft and were valued around the price of our house. Now my house is valued at 850,000 (could never get that much and could never get a loan for even 1/3 of it). We live in an area with controlled property tax so we only pay taxes based on our purchase price. However, when we do the financial aid calculators on the college board site it says he can afford 50,000 a year because of our personal wealth. My question is will college financial aid officers see that this not really the case and that we will not be totally out of the financial aid scene or do they expect me to sell my house?

Thanks

emeraldkity4

I assume ( as per my experience), that they expect you to access your " new found wealth" with a home equity loan to help to pay for college.
It isn't apparently relevant that you can't afford a bigger mortgage ( although lucky you to have controlled property taxes- our assessed value has been going up 15% for the last 15-20 years and our current taxes are what our yearly mortgage payment used to be. That is , before we had to refinance to access $$ for tuition.)

cptofthehouse

Get your house assessed for a new mortgage. That value would be one that you can use. Or have a true market value assessment done by a realtor as if you are going to put the house on the market. Either of those numbers can be used as long as you keep the paperwork showing how you got them.

somemom

Or apply to FAFSA only schools which do not include your HO in their calculations

Momof2sons

Refer to this link on the the FinAid website. We have used this calculator to estimate our home value for the Profile. We have typically added on 20% to the figure we get from this calculator as the home values in our town are quite high and even though our house would likely sell for about 450K, the house across our street would go for 900k and 2 new homes are selling for well over 1 million

FinAid | Calculators | Federal Housing Index Calculator

Also reference the book "Paying for College Without Going Broke", they suggest using a price that you know would allow you to sell your home "right away" and to deduct from that any costs associated with the transaction (real estate fees, $ you would need to put into the house to get your price)

We have followed these guidelines and have not had any questions as to our estimate of our home value for the years we have applied for aid at my son's college

kelsmom

When I worked in financial aid, I sometimes asked for proof of worth on homes. A market assessment from a realtor worked fine for our purposes. We asked when a home was out of line with others in the area ... but as long as the owner could show us that it wasn't worth that much, that was fine.

anxiousmom

Some of the Profile schools do not include home equity; others cap home equity as a percentage of income. Check the websites of the schools in question or email the financial aid offices.